Comment by thrance
2 years ago
I've seen many people saying, on this site and others, that they "believe in markets", as if it was their profession of faith.
When markets are allowed to work "normally", this is what always happens: regulations are lobbied to the ground, resources get depleted, profitable companies get destroyed to make a quick buck and everyone is worse off in the long term.
Having a strong economy is sadly harder than letting the markets "work their magic".
Couple points:
Strong companies usually aren't killed in this way. They are making everyone money and their share price is too high to allow activists to get a controlling interest.
"Regulations are lobbied to the ground" is not what is described in the article. The regulation was to conserve fish, and it was so onerous to comply with that only large companies could do it efficiently. Assuming this description is accurate, regulation (i.e. non-free markets) is causing this side-effect of consolidation.
Now, is the regulation worth the side effect? If the consequence is overfishing, yeah, I'll take a little hit to market efficiency to avoid tragedy of the commons. Avoiding tragedy of the commons is a great thing for the government to regulate. The flip side is that the government should have enforced anti-trust better to prevent the consolidation.
There should be a law that allows companies to self split once they become monopolies. As in a person can collect evidence of a monopolie and then can walk out of the busters office with the standalone part of the company thats the monopoly as a compamy of its own. Make those that conspire and lobby for the r monopolies those who would profit the most on busting.
I like the fundamental idea, but I don't like that structure. My own proposal would be progressive corporate taxation that gets increasingly punitive at extreme scale, intentionally pushing companies to split. We could set the "heel" of the curve higher than existing companies and inflate our way into it to give them plenty of time to prepare. We would need limitations on ownership to prevent "notionally separate but actually owned by the same people" cheating, but that's doable.
It will never happen, of course. The purpose of capitalism is not to serve customers by fostering competition, the purpose of capitalism is to give rich people an excuse to pay themselves for being rich. To establish, reinforce, and perpetuate a class hierarchy where the people on the bottom must constantly pay to exist while the people on top get paid to exist through their stocks, bonds, and real estate holdings. From this cynical perspective monopolies are a feature, not a bug. But if they were a bug, progressive taxation is how you would fix it.
I'm absolutely okay with the market destroying companies. It's literally one of the points of having a market to begin with. That sometimes also includes profitable companies.
I think the parent post is a fundamental misunderstanding of what markets are intended to do. If you want a static world that doesn't and can't change, then of course something like a command economy is preferable
I have no problem with unprofitable, severly mismanaged companies going out of business. I do have a problem when a company is liquidated to give an exit to shareholders when it is still profitable, as described in the article.
Honestly curious why? It seems a perfectly legitimate and even successful end to a company.
It seems to me that some people simply don't like change for sentimental reasons. There is no shortage of restaurants, and most frankly seem better.
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Market economies destroyed the wildlife fauna of North America. It's incredible when you see photographs of what used to exist here.
At least north america has some wild places and animals left. In most of europe there is almost nothing left. We destroyed everything.
Its mostly stuff in the west anyhow. Eastern half of the US is a lot like europe where if there was any ground fit to drag a plow it was plowed. States like Iowa are totally plowed. The idea of the federal government sitting on empty land for recreation is a new thing, really started with yellowstone after the US expanded west of the mississippi. Even yellowstone was almost dammed like the hetch hetchy.
Yes, if I were European I'd be prioritizing the hell out of protecting the remaining Old Growth forest in Europe in the south east, even if it means having the EU fund nature preserves / paying those host governments big bucks to have a ton of rangers there to stop logging.
Go look at parts of China, Russia, North Korea, and Vietnam and compare.
You also might be shocked to find that Native Americans also had a market economy.
How is that relevant? Yes, planned economies do no better on that front, what's your point?
And what do you mean about Native Americans having a market economy? Are you honestly comparing their economic system with ours? Or are you making a bad faith argument in favor of laissez-faire capitalism?
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> When markets are allowed to work "normally", this is what always happens: regulations are lobbied to the ground, resources get depleted, profitable companies get destroyed to make a quick buck and everyone is worse off in the long term.
Yes, there was a time during industrial revolution when laissez faire was experimented with in a region of England. It ended up in a total hellhole apparently. Also it looks like it was tried in Norway to a lesser degree and it ended up in another hell:
https://www.quora.com/What-would-happen-if-the-Nordic-countr...
I would love to see an experiment where the only type of regulation allowed was to price unpriced externalities.